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tv   Key Capitol Hill Hearings  CSPAN  June 2, 2014 10:00pm-12:01am EDT

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facebook and follow us on twitter. >> a look at how recent supreme court decision striking down limits on campaign contribution may affect first amendment free speech right. the role the treasury department plays on national security. then a discussion on baseball and american life. including comments from supreme court justice samuel alito. ....
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>> now i heard it foundation discussion on limited free-speech rights. they will also look at a proposed constitutional amendment overturning those core rulings. this is an hour. good afternoon. we welcome you to the auditorium. and those who have joined us on our website. several will be joining us on c-span today. those watching online are welcome to send comments at those in-house are asked to take that last courtesy check that
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cell phones are turned off as we begin. and of course, our online viewers are always invited to send questions or comments. hosting the discussion is elizabeth slatterly. she is our senior legal policy analyst in the center for legal and judicial studies. her research focuses on issues such as the scope of the constitution's commerce clause, federal exemption, and election laws. she also studies and writes about the supreme court, judicial confirmations, the proper roles of the courts, and judicial interpretation. she is regularly contributing to the rule of law post on a heritage policy blog. please join me in welcoming my colleague elizabeth slatterly. elizabeth? [applause] >> thank you, john. tomorrow morning the senate judiciary committee will hold a
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hearing on a constitutional amendment that would give congress the power to regulate raising and spending of money in elections. supporters say amending the constitution is necessary to get so-called dark money out of politics and to stop the kochres like brothers from allegedly buying elections. the supreme court has determined that bans on money are bans on speech. for anyone with experience in running campaigns, money is necessary to engage in effective political speech. today we have a panel of experts to talk about the proposed amendment. in order to get what they have to say, i will keep their introductions brief. first we will hear from bobby burchfield. bobby is an experienced trial and appellate lawyer with
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expertise in corporate amendment and first litigation. he argued the challenge to the mccain-feingold law. he also argued on behalf of senate minority leader mitch mcconnell in a successful challenge to aggregate contribution limits in mccutcheon that was decided in april. bobby has argued cases, appearing in courts across the country. he is a graduate of wake forest university and the george washington university law school. where he was editor-in-chief of the law review. he clerked for a judge on the third circuit. next we will hear from donald -- the former chairman of the federal election commission. he led what has been called a revolution in campaign finance, rewriting virtually all of the procedures for audit and advisory opinions. he has worked in private practice, and today he is in a
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government regulation practice. he also served as general counsel of the national republican congressional committee for nearly 10 years. he has been featured in major papers and has appeared in national publications, including politico, roll call, the hill, and the washington examiner. he has addressed members of congress at house retreats regarding congressional ethics and appeared numerous times on television, including fox news, and c-span. don is a graduate of notre dame. last but not least we will hear from a senior legal fellow at heritage. hans writes on a wide range of issues, including civil rights, the first amendment, and election integrity. he is known within heritage as the unofficial inspector general of the department of justice, having written articles about eric holder and various divisions at doj.
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his book "obama's enforcer" about the holder justice department comes out later this month. before joining heritage, he served as a member of the federal election commission and was counsel to the u.s. assistant attorney general for civil rights. he writes for politico and regularly appears on fox news as well as other national and regional outlets. he is a graduate of the massachusetts institute of technology. he received his jd from the vanderbilt university school of law. now i will turn it over to bobby. >> thank you, elizabeth. we are here today to declare victory. at long last the advocates of campaign finance restrictions are conceding that the restrictions on campaign speech they want simply cannot be squared with the first amendment.
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although there is no chance that the proposed constitutional amendment will be approved and ratified, defenders of free and robust political debate should not let the significance of this moment pass. the self-styled reform community has conceded their restrictions cannot be squared with the first amendment. victory. i wish it were so. this afternoon i would like to make three basic points. first, the mccutcheon decision is plainly correct. as you know, the campaign-finance regime contains two types of contribution limits. these limits impose a dollar cap on the amount of money a contributor may give to a candidate per election or political committee per year. congress has determined that the non-corrupting amount an individual may give to a federal candidate is $2600 per election. or $5200 for a primary and general election.
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the aggregate limits impose the cap on the total amount of money a contributor may contribute to all candidates and all political committees in a two-year election cycle. for contributions to candidates, the aggregate limit is $48,600 per cycle. once a contributor gives $5,200 to nine candidates, he is at $46,800. he make give only $1800 to all other candidates. if it is perfectly legal to give $5,200 to the first nine candidates, why is it a felony to give $1800 to the 10th candidate? $1801 two the 10th
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candidate? this makes no sense. put simply, you cannot corrupt candidate smith the 10th candidate by having already given a legal contribution to candidate jones, one of the first nine. the motivation for the aggregate limit is to equalize political speech. few people can give more than a few thousand dollars, so the aggregate limit keeps more generous donors from giving too much. decades of supreme court precedent has made it clear, defenders of the aggregate limit recognize that precedent would not allow them to defend them measure. -- as a speech equalization measure. they defended it as a measure to prevent circumvention of the base limits. unscrupulous intruders they said would try to channel contributions to candidates and political committees to the preferred candidates. this led them to rely upon what alito referred to in the oral
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argument as "speculative hypotheticals." even justice breyer's dissenting opinion allows three hypotheticals to suggest an inch could relist router will go to great lengths to obey the base limits if there is no aggregate limit. two quick responses. persons knowledgeable about the campaign-finance laws and regulations, as many of you are, will see that justice breyer -- -- hypotheticals assume it activity -- assume activity. moreover, even under the aggregate limits as they existed until they were struck down, contributors could give the maximum amount of money to nine candidates. if contributors were able to channel excessive contributions through other candidates or political committees to a preferred candidate, there should be evidence, one example in the last four decades, one would think, of this channeling in prior election cycles. yet the government had no such evidence. first amendment rights should not be restricted based upon so much speculation. the aggregate limits made no
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sense and the court correctly struck them down. my second point is that mccutcheon, like citizens united, did not really break new first amendment ground. rather, those decisions returned to established first amendment principles after a decade of deviation. the mccutcheon decision is grounded on two such principles. first, speech equalization or leveling the playing field is offensive to the first amendment. this precept is a cornerstone of a case in 1976 in buckley and a landmark precedents case in 1964 and the associated press versus united states in 1945. this desire to equalize speeches to limit the speech of the wealthy so they cannot dominate the debate is i believe a major purpose of campaign-finance restrictions and a key motivation of the effort to change the first amendment.
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the second fundamental precept underlying mccutcheon is that avoiding corruption or the appearance of corruption are the only governmental interest recognized under the first amendment for restriction -- restricting political giving and spending. moreover, in this context corruption means quote -- quid pro quo corruption, the giving of money for political favors. this precept dates back decades. -- we court wrote in 1985 held in buckley and confirmed in citizens against rent control of preventing corruption or the appearance of corruption are the only legitimate and compelling interests thus far identified for restricting campaign finances.
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it continued, the hallmark of corruption is the financial quid pro quo dollars for political favors. the court began to deviate from these principles in the late 1990's and the second colorado decision. a court majority began to expand this anticorruption rationale to encompass warchest corruption, which means an individual or corporation had too much money. access corruption, which means by giving money you might be able to shake the senator's hand, and even gratitude corruption, meaning if you gave money to an office holder they might be grateful for it. this deviation reached its peak in the mcconnell decision in 2003, which upheld the sweeping restrictions on political speech in the bipartisan campaign reform act. citizens united and mccutcheon have reversed this trend and returned first amendment jurisprudence to its basic principles. cries from the reform community about how the roberts court has ignored precedent and rewritten the first amendment are simply mistaken. my third and final point day is -- today is that the self-styled
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reform community is trying to read into the first amendment their own view of what a democratic government should be. by its language and the principles applying to it, the first amendment protects the marketplace of ideas, promoting discussions with the assumption that a free people can assess for themselves the strength of the arguments and make informed electoral decisions. this means the government is not -- does not silence anyone. it is not limiting anyone. it does not referee the debate. in recent years the self-styled reformers have begun to suggest that free and robust debate does not promote democracy, but threatens it. they contend allowing the wealthy to spend -- to speak more can drown out the voices of the less wealthy and that the very volume of speech in certain quarters threatens to delegitimize, they would say corrupt, the democratic process. justice breyer's dissent appears to adopt this argument.
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this is a very troubling argument, and those who cherish the first amendment must push back strongly and vigilantly. this notion that the first amendment poses a duty to limit speech to protect democracy turns the free-speech guarantee on its head. other provisions protect the integrity of the process, but the free speech clause of the first amendment protects debate -- unfettered debate so the other provisions can work. this notion that too much speech is undermining democracy is in accurate on several levels. the rich do not advocate a single viewpoint. think of sheldon adelson and george soros. they do not agree on anything. there are strong voices on the left and on the right, not just in privately funded campaign advertisements, but also in the broadcast in the print media. only a small portion of those with significant resources, even bother to participate in debate. among those of limited means portion is small.
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in order to equalize debate among the haves and have-nots, severe restrictions will be necessary. the quantity and the quality of discourse would certainly suffer. let's trust the public to listen carefully to the most robust debate possible and to make decisions based on more information, more debate, not less. that has always been the premise of the first amendment. end of american democracy. americanl of democracy. thank you very much. [applause] >> good afternoon. i want to thank heritage for having me here and putting on this panel. i want to begin by echoing what bobby said about declaring victory. my reaction when i heard that senate democrats were going to push an amendment to the constitution changing the first
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amendment was they are amending -- finally admitting that what they want to do is unconstitutional. for over two centuries, we have agreed that the idea of robust political discussion is necessary in a representative democracy. when you elect representatives to go to washington or to go to your state capitals you do not micromanage everything they do. you trust their judgment. the way to ensure their judgment remains somewhat pure and at least consistent with what the people want is that the people can speak out and criticize those folks once they get in office. that is how we do things in america. i'm not sure how they do things outside of america, but i know here when you elect folks you have to be able to criticize them. if you cannot, they may lose touch with the people. what we have seen recently is a real assault against this sort of approach. when the citizens united opinion came down, there was first shock and disbelief on some parts of
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town, other parts of town were doing dances. but really what came about after that was an amazing site, from sight, fromg president obama during his state of the union address making what was probably an unprecedented remark, claiming citizens united opinion would usher in foreign national money that was simply not true. we know who was right and who was wrong in that. second, we saw the irs do what the irs did, asking all sorts of bizarre questions of people from what sort of books they read to what sort of prayer groups they went to and the like. third, and this is one that flashed on the scene and disappeared. the fcc flirted with the idea of
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monitoring newsrooms just to check the balance. remember that one? at disappeared once people figured out what that was about. that's not forget that because that seems to be the sort of thing that in america we should not be doing, and then now the most recent is you have the majority leader of the senate harry reid seeming to redefine the use of special order speeches and four statement -- floor statements attacking , various individuals, a couple in particular, for speaking their mind, if nothing else. it is a bizarre time in which we live, and just when one thinks it cannot get any more peculiar, they are now pushing amendment to the constitution to essentially change the first amendment. they are doing it smiling and they seem to think that somehow the wind is at their back. frankly, i think it is political theater. there's no chance of this becoming the law. senate democrats are in trouble. they know it. any reputable political tracker will tell you this, whether
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it is charlie cook or stu rothenberg or any the folks who will tell you senate democrats are slowly losing their grip on power. i suppose desperate times call for desperate measures. now they are attempting to amend the constitution as part of their grandstanding to silence the critics. it is a shame. why do we have the first amendment? what gets lost is it is not there because we need a placeholder in the bill of rights. there's history there as to why we have it and it goes back to when we were under the rule of england, and for about a hundred years england was and to a certain extent has had a different view of free speech then we have here. the licensing orders 1643, for example, essentially banned all sorts of public speech, newspapers, and the like. they had to be licensed and by the crown and later parliament. the kind of speech they did not
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like the most was the kind of people like the most which was critical of the crown of england. what the government did was, they simply said you had to license it. this is effectively a ban, so you had to register all print materials. there were some draconian provisions that were attached. you could be arrested. that sort of thing. fast forward. then the stamp act, remember this from history class, that was in 1765, had nothing to do with the stamp to put on mail pieces, but had to do with the fact that the crown required but a stamp be placed on all printed materials. in order to print anything in the colonies, one had to pay a tax. you had to get permission to speak yet again. we fought a revolutionary war over this concept, and as part of the deal adopted the constitution, the bill of rights, and the first of it which contains the freedom of speech and association among others. now here we are in the midst of
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an election battle where certain politicians are gripping to power as only politicians can and now they want to change the rules of the game and prevent people from criticizing, not unlike england did before the revolution and which led to our revolution. here we are, and what are they trying to do? i have a copy of the proposed amendment front of me, and it says to advance the fundamental political equality for all and to protect the integrity of the legislative and electoral processes, congress or how the process to regulate the raising and spending of money including the setting of limits to the amount of contributions to candidates for nomination or four elections to federal office and the amount of funds that may be spent by and in support of or opposition to candidates. section two expands power to the states. which is an even more radical change, because talk about
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federalizing elections. it empowers regardless of what a state constitution says it would trump that. what does this mean? it invokes the fundamental principle of political equality, whatever that means. for all. yet there is an exception in the later proposed amendment that exempts out the corporate press. it says nothing in this article shall be construed to grant congress the power to abridge the freedom of the press. in other words that means if you , are the incorporated media, which it is the mainstream media today, it seems you are exempt from this. if you are a blogger or someone who is maybe on the cusp of being media, watch out, this seems to empower congress to regulate you or otherwise potentially ban you from speaking. what some of this means, who knows, and as one who has done nothing but election law for my career, i scratch my head and wonder why they have to do this, because when they want to pass
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an amendment that says congress shall have the power to regulate the spending of money, congress does have the power to regulate the raising of money. buckley vs. vallejo upholds contribution limits. they have been upheld cents. since. are too low have been held to be an abridgment of speech, but for the most part courts have already upheld the ability to limit contributions. the government has -- with banning certain kinds of speech. much of it is still banned, the so-called coordination with candidates, which is subject to a murky multi-factored test. , they have the power to do that. so the question is what are they doing? they are going to try to limit independent speech. what is interesting is the courts have upheld some disclosures independent speech which six months ago was supposed to be the answer. that was supposed to cure all the ills in our democracy, but
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unfortunately, i guess they have , given up on that and move to more radical changes which is the constitutional amendment. when you read this text you think what the courts have already upheld, what are they getting at? they're getting at the tv advertising we are seeing these days criticizing the senate and frankly, democrats, for what they are doing. the question is, why can't we do this now under current law? what is amazing is many of the ads that people are currently complaining of are not covered by current law. unless they contain express words of advocacy, they do not even have to file a disclosure report, which is as it should be. if you are near an election, mccain-feingold imposes additional requirements. these sort of ads we have seen lately are not election ads, they are issue ads, speech designed to influence the acts of politicians. which is precisely the sort of's beach that is at the heart of the first amendment.
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-- the sort of speech that is at the heart of the first amendment. with that i have a few questions for the sponsors of this, see if they can answer these questions. maybe they will answer them tomorrow. probably not. have are supposed to hearing several weeks ago which was supposed to be a campaign finance hearing and at the last minute they added retired justice john paul stevens to the witness list and started talking about amending the constitution. i testified about how the party committees have been marginalized. they did not ask a single question. they're more interested in talking about amending the constitution. here are some questions. under this amendment regulating electoral processes, integrity of legislative offices, could congress prohibit a labor union from communicating with its members if that communication somehow affected the legislative or campaign process? i would think the answer is yes. what about other membership
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organizations -- the nra, sierra club? that sort of thing? could congress ban communications between those groups and their members regarding politics? seems to be what this may permit congress to do. can it be speech selective? it does not say anything about -- it does not have the clarity of the current first amendment. it talks about political equality for all. when you read the dissent in mccutcheon, it seems that political speech equality means you can ban some speech and not other speech. it seems far-fetched that somehow speech equality could lead to some people being banned and not being banned. think back to our recent history. when the fec considered "fahrenheit 9/11," the fec said it was fine because it was a commercial movie. that was not prohibited.
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but when citizens united came in and asked about "hillary," fec said, nope, sorry, that was banned. i cannot tell the difference between the two movies. except one thing says -- one thing says bad things about george bush, a republican, and the other says bad things about hillary clinton, who was a democrat. you say bad things about the republican, you're fine. if you say bad things about a democrat, you're going to be banned. what about pastors and churches? can the government now get in there and tell a priest he cannot talk to his congregation because it may somehow have something to do with politics? this amendment would seem to permit congress to do that. what about bloggers? what if your companies try to make documentaries that the mainstream media do not consider? we have seen it with the citizens united movie. let's not forget the facts of the case.
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notwithstanding the hyperbolic press coverage, it was about a film and whether it could be seen and bought on pay-per-view cable by adults in the privacy of their own home. the federal election commission and later the solicitors general office said, no, mccain-feingold said you cannot watch that movie in the privacy on your own home on pay-per-view cable. that was the fact. that went to the supreme court. this is not a situation where we are talking about we are just going to ban campaign stuff. we're talking about banning movies here. what about books and movies generally? 500-page book is a book that talks about public youcy, but it does say should not elect someone to be president? does this amendment empower the government to ban the book? i'm afraid that does. this is why this needs to die so we can continue to criticize our elected officials in an elected democracy. thank you. [applause]
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>> maybe i will sit down because i think they have said everything they need to say about this. i will add a few words. the slide we put up is basically the constitutional amendment, the important parts of it. you will notice as don said it would not only limit, give congress the power to limit the contributions that can be given to a candidate directly and also the expenditures at a candidate could incur trying to run for office, but you will notice is also says that it would give them the power to limit the amount of funds spent by in support of or in opposition to a candidate. what that means is it would give congress the power to limit independent spending by individual americans.
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now if you think that congress , would never do such a thing, i should tell you that in fact in the early 1970's when congress passed the modern version of the campaign finance laws that we have operated under now for 30 years, they actually passed a ban on independent expenditures by organizations and individual americans limiting them to only $1000. that meant if you as an individual did not like somebody running for congress in your particular state and you wanted to take out an ad in your local newspaper, all on your own, no coordination with any other candidate, to try to convince your neighbors not to vote for that particular candidate, you could not spend more than a thousand dollars doing that. so congress already tried to do this in the early 1970's.
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now, fortunately, in the buckley decision, which is the seminal case, 1976, in which the supreme court came up with a standard it uses in this area, which is to say that laws that prevent corruption, the appearance of corruption, will be considered acceptable and can be used to somewhat limit first amendment rights. in that case, fortunately, the supreme court through -- supreme court threw out that thousand-dollar limitation on independent expenditures. it shows you the kind of ideas congress previously had about it. if this amendment passed it could pass a law about that immediately and there's nothing anybody could do to stop it. if congress said i think a thousand dollars is too much, for anybody to spend on independently on political
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speech, they could crank that down to $500, $100, to $5, and there is nothing anyone could do to challenge it, because they would have changed the first amendment to do that. now, the supporters of this and ient, all 41 of them, find it absolutely shocking that almost half of the united states senate would for the first time in american history support something that would roll back part of the bill of rights, something unprecedented, that has never happened in this country, they say when you restrict the amount of money that individuals can spend, raise or spend, that is not the same as restricting free speech. as the supreme court said in the buckley decision 30 years ago, virtually every means of communicating ideas in today's mass society requires the expenditure of money.
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from the humblest handbill to leaflets, to political ads run during prime time, tv, radio, to putting up billboards, putting up yard signs or in the modern internet age, putting up a website, all of that costs money. and the days when you could stand on a soapbox in the boston common and speak politically to get people to accept your ideas or to vote for you as a candidate are long gone, and even then if you wanted to be effective it cost money. that she wanted to be effective. it cost money. again, those who say the framers never imagined that the first amendment would protect money spent on political speech, political activity, excuse me, but one of the greatest works in america that helped spur our revolution, thomas paine's "common sense," it cost money to distribute it. "the federalist papers" were
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printed in broadsheets which were the equivalent of newspapers at that time, all of which cost money. the idea that if you restrict money you are not restricting free speech is ridiculous. that is the same thing as saying if you restrict the amount of money that a newspaper corporation like "the new york times" can spend, that is a ridiculous claim. this case as we talked about would not just overturn the citizens united decision and the mccutcheon case, but it would overturn the buckley decision, the case from 30 years ago, because it would also overturn what the supreme court said in that case about expenditure limits.
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people do not realize back in the 1970's congress did not just pass contribution limits. that is what we have lived under now for 30 years. back then they limited the amount you could give to a candidate to $1000. it stayed that way for 30 years. it was raised to $2000 in 2002 and indexed for inflation. at the same time in early 1970's congress put in and expenditure limitation. they said that people running for congress and president would be only be able to spend a certain amount of money to run for office. the supreme court threw that out because they said that is a direct limitation on your first amendment rights. when you limit the amount of money that a candidate can spend you are directly limiting their speech. you are limiting the amount of resource they can send out, the amount of ads they can do. you are limiting their ability to rent a hall and go speak live in person to voters. they threw that out. this amendment would get rid of
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that limitation that the supreme court came up with, and once again, congress could actually pass a law limiting how much you spend. for those of you who think that is a good idea i remind you that once congress but the contribution limits in the 1970's, you can look at a graph of the incumbency rate of members of congress, and that line will be like this. it just goes steadily up. why is that? because limits on contributions help incumbents. it is very tough for a challenger to take out a sitting member of congress. they do not have the name recognition, contact us, it costs a lot of money to knock out a challenger. when you put on limits on contributions, you're making it much easier for incumbents to stay in office. if you put in limits on expenditures, which as with has been shown by history, congress has demonstrated it wanted to do, you would be making it an even tougher thing for challengers to come in and knock
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off members of congress. i will tell you that i do not think it is just a coincidence that in january 2010, when citizens united was decided, what happened in november? in november 2010 we had some of the most challenging congressional races since the 1930's. that is because directly of the citizens united decision and the fact that suddenly it was independent political expenditures come of the ban on that, had come out. i want to talk about something else, and don just mentioned this. this shows what congress could do if this amendment were passed. the citizens united decision, there was something unusual in that, in that were there were
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two oral arguments for the supreme court, not just one. in the first oral argument i attended, roberts asked a hypothetical question of the government. it concerned the electioneering communications provision. this is a provision that congress had passed in 2002 that limited and banned the ability to run any kind of radio or tv ad 30 days before primary and 60 days before a general election that named the candidate for federal office. the problem with that ban was you could be running an ad, you could be the sierra club, and you could be running a political ad about a bill that was going to be voted on by congress on october 15, that had to do with the environment.
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if you named a congressman who was running for office, if you simply told voters, this is an important bill coming out, call your congressman and tell them to vote against this bill, you would be breaking the law if that congress on was up for election in november, even though your ad said absolutely nothing about the congressman in terms of voting for or against it in the upcoming election. it is one of the provisions the supreme court threw out. that provision only extended to radio and tv ads. the chief justice asked the government, if we uphold this provision, could it be used to ban books by the government? a book that discusses the system, and in the end and so vote for x, could the government ban that?
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the answer given by the assistant solicitor general was yes, we could prohibit the publication of a book. i find it amazing that the solicitor general's office of the united states would give such an answer that they think there is nothing wrong with banning books in the united states of america. some will say there's too much money in politics. the intent of this is to get money out of politics. i always have to laugh at that. i looked this up before he came down here. in 2013 american company spent over $140 billion advertising their products across the united states. if you checked several of the websites that total up political spending, you will find in the 2012 election cycle we spent about $6 billion on elections. that is about the same as committees and advertising fast food and candy in united states last year.
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so this idea we are spending too , much money and restricting it is the right way to go when we have such a great first amendment that believes in increasing debate in this country i think is just wrong. the more political speech we have, the better, and i am shocked at the idea that congress, members of congress, would be in favor of restricting the first amendment. these are complicated issues, but i want to boil it down to this, because this is what this amendment would allow if it was passed. many of you may know that the federal election commission does impose civil penalties on individuals who violate finance laws. if you knowingly and intentionally violate the law you can be prosecuted criminally by the department of justice and you can go to prison for up to
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five years. what a lot of people seem to forget was that david bossi, the president of citizens united, because of the fact that after the fec told citizens united it was not allowed to advertise for this documentary made about hillary clinton, because if they had gone ahead with it after he had advised that he cannot do it, that would have been considered an intentional and knowing violation of the law and he could have gone to federal prison for five years and be prosecuted by the justice department. why? because he made a movie. i do not know about you, but i do not want to live in a country in which congress has the authority to pass a law that would put someone in jail for making a movie or political documentary, writing a book, setting out a voter guide, pushing a pamphlet, or taking at a political ad, or because a candidate spends $100 more than
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some artificial expenditure limit that the incumbents in congress put into limit the amount of spending of anybody who wants to try to throw them out of office. i think this violates the most basic tenets of freedom and liberty on which this country was founded and that the bill of rights was intended to protect. it is not the kind of country i want to live in. thanks. oh, and one more thing. i almost forgot. i did think there was an amendment at heritage that would like to propose, and you will see it is actually funny, it is exactly the current first amendment we have. [laughter] >> we will open it up for questions from the audience in just a minute. we have three ground rules. first, wait for the microphone, please state your name and affiliation, and ask a question,
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do not make a speech. if there are any questions? ok. down here. >> what do you think is the real motivation here for the left promoting this? it may be that this is popular or this will turn out to be a huge popular mistake. and do you see any way that, given the fact that now 22 or 23 states have called for in article 5 convention for a balanced budget, the left might be hoping that the convention occurs that could turn into a runaway convention that they could use to propose this amendment? >> i guess i will go first.
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i think he it is being driven by two things. first is pure politics. second, i think that which is more scary of the two, some of these guys believe this is what we should do. as i mentioned in my comments, it is an election year. election years cause people to do things that they otherwise would not do. we certainly see a certain drumbeat instigated by democrats to try to take various messengers and messages, and i think this fits hand in glove with that. i think it is also designed to intimidate people who are criticizing them. this is nothing new to the extent that we have seen governments do this throughout our history. we have not seen our government do it at least in our recent history. notwithstanding efforts to limit have it struck by the supreme court, the idea of such targeted efforts i think are precedent.
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i such targeted efforts, think, are unprecedented. but, too i think some of them , believe it. judge bork called it radical egalitarianism. the question is what is equality? when we see this play out, equality seems to have an orwellian notion to it where some are more equal than others. i think that is part of what is happening here. i think long term it is bad for the people, and for the city the people. it is good for the incumbents. ultimately is probably best for those who get to make these decisions. when one looks at the text of the amendment, i am struck by who gets to the police limits on campaign spending. we know from the federal taxpayer funded residential -- presidential elections that the fec used to employ sorts of people and employee certain
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types of audits. one can imagine a mandatory audit of every campaign in america? i was at the fec several years. there are people who do not play it straight. recently there was someone at the fec. obamay campaigning for and then for romney. this was someone in the enforcement division according to the press. the idea that you will have a neutral decision-maker over these things is a fallacy. the same about that carve out the freedom of the press. imagine having to go to the department of motor vehicles and convince them you are the media. do you want faceless bureaucrats doing that? i understand dmv has gone a long way in d.c. and virginia. i don't want to cast any aspersions personally, but you
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know it is convenient to scapegoat. as far as a convention, that takes a little long-term thinking of the sort we are not seeing. i think what's we are seeing a strategy between now and november, and you see incumbents desperately clinging to power. >> you have something you want to add? >> we are dealing with a well-established, powerful and well-funded constituency that has for decades advocated restrictions on campaign finances. interestingly, one of their big issues is the so-called dark money issue. where do they get their money? none of these groups disclose their donors. we think we know where the money is coming from, but they do not disclose it. there is a bit of hypocrisy
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there, but there is also a strong constituency for increasingly severe restrictions on political speech. as for the constitutional convention, i think that is a concern, but i do not detect a great public groundswell for these sorts of restrictions, and i think most people understand that the purpose of the first amendment is to promote free and robust debate. the american public seems to like that. i would be surprised to see a constitutional convention go down that track. but it is a possibility. >> my name is sarah, and i work for free speech for people. i meant to ask two questions. i think there is a perception that spending on campaigns, both in direct commission and in independent expenditures, has increased dramatically since buckley and citizens united.
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i'm wondering if you can attest to the accuracy of that perception? i am also wondering if you are aware of any opinion polls about citizens united and mccutchen and how the public feels about that current campaign? >> i will go first. taking them in reverse order, i am not aware of any recent polls. i have seen news coverage of polls, and they say no one likes citizens united. then when i read the poll, i realize the question is skewed. i do campaigns for a living, and like to think i can't read polls, and i realize when you ask a question a certain way you will get a certain answer. when you're asked a question, do you think they get international corporation should be able to buy elections, 80% say it is a bad idea.
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i wonder about the other 20%. [laughter] if one were to ask the real question, should the government be able to ban a movie that talks about a politician from pay-per-view cable so you cannot watch it in your home, which is the fact of citizens united, the poll should come out exactly the opposite of what most of the polls say. i look for more than an informed question and not the superficial question that talks about the james bond bad guy behind election kind of thing. there is no -- in absolute dollars, spending has increased. spending on everything in america has increased since buckley. at the time of buckley a brand-new mustang cost about $3500. contribution limits imposed by buckley were $1000. if one were to convert the thousand dollar limit to today's dollars, it is about $4500. state parties are limited to accept $10,000. if one were to index that, it
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would be $48,000. spending has gone up, but the way spending has changed is more of the story. candidates have lost their ability to be the central voice in democracy in large part because of the reform laws. money has moved away from candidates and parties that are not as transparent, accountable and not as long term. yes, the total spending has gone up, but when compares it to other spending, a very interesting approach, compared to what other people spend on advertising, it is a drop in the bucket. ultimately it is not about the money, but about what money buys. the cost of tv advertising has skyrocketed in the past 10 years. used to get a week of television
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in a house race for up to 400 grand. now it is a million dollars a week. postage has gone up. compliance costs have gone up to make political phone calls that require an ever-changing set of review processes comply not only with law but an ever shifting group of state laws. everything has gotten more expensive. bottom line, even though spending has gone up, there is still not enough money in politics to keep up with the actual information flow that i think voters deserve. ultimately the answer is more information for the voters. not less. it is unfortunate that takes does, and it advertising costs a lot of it. >> i agree with all of that. i would add to the last point, this is the american democracy, the american electoral system we are speaking of. to me, more debate, more speech, more focus on the issue,
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television and ads, that is a good thing. i do not think it is a bad thing that people are airing a lot more television ads, and they are because the restrictions, because of the first amendment applications, have rolled them back. the second thing i would say is with regard to polling. it is true these questions, and i have been on panels to discuss polling, the questions of whatever the results of the polls, the questions are almost always slanted one way or the other. i have not seen a question that fairly presents the issue in my view. they can be complex issues. they are difficult to phrase in a one sentence poll question.
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but even if 85% of the american public wanted to impose tighter restrictions on campaign speech, that is what the first amendment prevents. the first amendment protects us from that tyranny of the majority. it protects the right of individual persons to say unpopular things. that is the spirit of the american democracy. that is the tradition of american democracy, and frankly i think that is also a very good , thing. >> [indiscernible] i am curious about how you see this playing out in the senate, the actual debate in the senate when senator reid brings up this amendment proposal. will there be an alternative proposal debated, will it be a straight up or down vote on this proposal, and would you predict it will end up being a party line vote, which will be far short of the 2/3 needed to pass it?
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>> let me take a first shot. i will just make a couple of comments. you know, i am not sure how the politics of this play out. for democratic senators in close elections, going on record as to change the first amendment will -- might not be such a popular vote. i could see a really bolt from the majority leader on this issue. he may have enough votes, the power to keep his caucus in line on this, but to me it is not a foregone conclusion that you will have all members of the democratic caucus stand up and vote party line on this, that changing the first amendment is a good thing. >> i would say something that tells you an indication of this, i think is the fact that the administration miscalculated recently why they got the irs to
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propose new regulations for 501(c) 4 organizations. those are the advocacy organizations that are used, the nra, sierra club, and the administration proposed these new regulations that would have severely restricted the political speech and act -- activity of these organizations. the irs was overwhelmed with public comment in the negative. they got over 150,000 comments, more comments for that one proposed regulation than all the other regulations that treasury and irs proposed in the last seven years. they were overwhelmingly against this change that i think they thought would be popular. as a result the irs has back off and said we are not going to put out these regulations this year. we have to take into account all these comments on it. as an indication of how they have miscalculated on this issue.
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>> hi, my name is ariel. i am at the columbia school of law and a law clerk. laws that interferes with any type of political speech are subjected to strict scrutiny, and that the government needs to prove there is a compelling interest -- -- the restriction furthers a compelling interest. the wording is to advance the fundamental principle of political equality. despite that specific wording, have any of the democrats showed any type of narrowly tailored interest? >> no. that is kind of the point of the amendment, right? what they are trying to do is end-run the idea of strict scrutiny, which was made up. the amendment says what it says, but it says congress shall make
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no law. it means that congress shall make no law -- unless there is a compelling government interest that is narrowly tailored. you raise a question, the idea that political equality for all, a new principle being interjected here in the world of speech, and it is that language that would empower congress in and of itself. what is clear is the senator and others have not resented -- presented anything in analysis of this. maybe there is a paper that hasn't been seen, but i doubt it exists. >> there are democratic process the first amendment.
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the first -- that is that the first amendment should be used to suppress speech. there are troubling missions. -- notions. >> we have time for one more. mention it could limit communication between the group and its members. would you say more about that? law whencurrent corporations were banned from sponsoring certain political communications, corporations and labor unions were exempted to when it came to those communications if they were sent to the restrict did class. if i were a union acts and
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that said run an ad to vote against so and so, if i had done it prior that would have been illegal. the administrative stockholders was exempted. theink it is not just speech concern but also the associational concern. empowers congress in the name of political inequality protect the legislature, this is not just electoral. congress.s i don't see how you can read this any other way than to say congress would have the power to limit the ability of a labor union to talk to its members
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about politics or any other organization. one can imagine i would have a this,day doing tv copy on the idea that they would vote to prohibit the union from organizing, that kind of thing. i don't know what this means. i am looking at this compared to current law. i think it really does get at all sorts of other political activity we have taken for granted for years that we don't do because of simply the benevolence of congress. the firstuse of amendment, but that is going to change. >> please join me in thanking our panel. [applause]
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thank you all for coming. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] for himfew moments of on the role the treasury department lays and national security, including comments from the treasury secretary jack lew. and then comments from supreme court justice samuel alito. then the administration announces its plan to reduce carbon dioxide emissions from power plants. several lives of fence to tell you about. the center for strategic and -- live events to tell you about. the center for strategic and intelligence hosted a for him -- on national security. and environmental subcommittee
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on wildlife and agriculture. witnesses include the head of the fish and wildlife service. response to a recent supreme court decision on campaign the senate will consider a constitutional amendment that will allow congress and the state the authority to set limits on racing and spending money on political campaigns. >> financial journalist michael lewis. this are living through time. there are real structural problems. i am not an economic forecaster, but everything i read suggests we are going to live with unusually high levels of , a lot of pain from
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indebtedness. a quarter of the country is on food stamps. it's not a great depression. we are not reprising exactly what happened in the 30's, but it's a version. >> read more from michael lewis .nd other featured interviews now available for a father's day gift at your favorite ookseller. >> now part of our coverage on a forum of the treasury department's role on national security and the work done by the office of terrorism and national intelligence. we begin with treasury secretary jack lew. [applause] >> thank you, john, for that kind introduction, and i want to
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thank the center for strategic and international studies for hosting this event. for decades, csis has done tremendous work to shape national security policy, and it is great to be here today with so many people who have dedicated themselves to tackling our strategic challenges. i also want to thank the men and women who have made treasury's office of terrorism and financial intelligence -- tfi -- the indispensable institution that it is today. in particular, i want to thank under secretary david cohen and his predecessor, stuart levey, for their vision and hard work. i also want to recognize members of tfi's leadership team -- danny glaser, leslie ireland, adam szubin, jennifer shasky-calvary, and eric hampl -- for their outstanding service to our nation. and i want to express my appreciation to the over 700 dedicated civil servants who are the backbone of tfi. we meet today almost 13 years since the deadliest attack on american soil took placeone that killed nearly 3,000 lives and shook our nation to its core. everyone here remembers
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september 11th , a horrific attack that unfolded quickly and slowly all at once. first, in new york, then washington, and finally pennsylvania. it was a tragedy unlike any other, catching us by surprise and shattering a sense of security that we, as americans, had come to feel. working and living in new york, i watched that day as the twin towers fell, and so many lives were changed forever. this was a turning point for our nation. it transformed ordinary people into heroes, drew young patriots to the battlefield, and lifted the veil on the real danger posed by violent extremists who were not only well-organized, but well-funded. in the wake of the attacks, our government shifted its approach to national security coordination and use of all tools. as part of that change, there was a new focus on the importance of disrupting the finances and funding networks that fueled terrorist organizations.
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this led to the creation of tfi 10 years ago. it was the first office of its type in the world. up until then, counterterrorism had largely been a matter for the military, diplomatic, and law enforcement communities. until then, neither finance officials, much less entire finance ministries devoted much of their time to tackling this threat. yet the talented team put in place at treasury designed and implemented an innovative and effective strategy to combat terrorism by attacking the financial foundations of terrorist organizations. and without a doubt, their accomplishments have made our country, and our world, safer. since tfi's founding, as tfi's efforts expanded beyond counterterrorism, the treasury department role within our national security apparatus changed dramatically. today, because of the professionals, experts and leaders at tfi, treasury provides analysis that is vital to the entire intelligence and
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policymaking establishment. we develop and implement policies to combat money laundering and other financial crimes. we work with foreign governments, global financial institutions, and businesses around the world to strengthen the integrity of the international financial system and increase transparency. and we design, implement, and enforce sanctions programs to thwart terrorist networks, drug traffickers, organized criminal groups, and wmd proliferators. to be clear, this new financial front is not a new version of a trade blockade or embargo, it is an altogether new approach, targeting the financingthe cashin order to block the funds of illicit actors and impact the political calculus of state actors. over the years, the use of tfi's tools has proven to be a decidedly bipartisan effort, vigorously supported by both a republican and a democratic president, and members of congress from both sides of the aisle. over the last decade, the united states has spent more than a trillion dollars on military combat efforts. this helped swell our deficits and shrink our ability to tackle problems at home and abroad. but tfi has opened up a new battlefield for the united states, one that enables us to go after those who wish us harm without putting our troops in harm's way or using lethal
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force. and this administration has been particularly creative and innovative in using this approachboth because of the changing international landscape and our determination to use all the tools at our disposal to advance our strategic interests. at the same time, these actions have consequences. these new financial weapons are targeted in a way that broad-based economic embargoes never were, and we have become proficient at reducing collateral damage. our goal, as it should be when using any powerful weapon, is to have the desired impact while doing our best to limit collateral consequences. nevertheless, we need to be prepared to take tough action when necessary, as it is better to avoid military options if we have economic and diplomatic tools that work. but we cannot escape the fact that when we deploy these methods, there will be those who will unintentionally pay a price. as america lives up to its unique responsibility to lead, we must use a wide array of tools at our disposal to promote stability, peace, and freedom
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around the globe. that includes the entire tfi arsenalgathering intelligence, engaging in diplomacy, mobilizing allies and partners, increasing financial transparency, creating systemic safeguards to make the financial system more resistant to illicit money, and imposing sanctions. with sanctions, both actions taken and the credible threat of action are powerful tools. the mere possibility or anticipation of sanctions has real economic consequences as investors take notice and businesses are disrupted. and when we act, governments, businesses, banks, and financial institutions around the world often comply even when they may not be legally obligated to. the fact is, tfi's expertise, authorities, and relationships are now fundamental to combating national security threats and advancing our foreign policy objectives. in a world where economies are more connected than ever before, where technology is innovating and expanding at a rapid speed, where small bands of extremists can do serious damage, and where powerful alternatives to
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military action are a necessity, tfi has expanded the strategic options available to all future presidents and made our national security responses more effective. you can see this in in a whole host of arenas. let me highlight just three. first, over the last decade tfi has been actively at work disrupting and degrading some of the most significant terrorist threats to our country, consistently blocking assets of terrorist groups and exposing their activities. it is no exaggeration to say that right now terrorist networks struggle to obtain funds because of tfi's counter-terrorist financing activities. today, it is harder than ever to hide and move illicit money. and there are harsh consequences for financial institutions and other facilitators that help fund terrorism, including those that attempt to do so from within our own borders. just think, at the time of the september 11th attacks, al qaeda was relying on both a web of wealthy supporters who essentially operated out in the open and a formal financial system that let money for terrorists move around fairly easily. that is no longer possible today.
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president obama said last week, "for the foreseeable future, the most direct threat to america at home and abroad remains terrorism." with tfi, treasury continues to confront and combat that threat each and every day. in fact, last year alone, tfi designated 87 individuals and entities under our terrorism sanctions program. this cut them off from the u.s. financial system, and publicly exposed their illicit activities on behalf of terrorist organizations, such as al qaeda in the arabian peninsula and the haqqani network. now, in conjunction with tfi's counterterrorism strategy, we have aggressively targeted foreign drug traffickers, weakening the cartels by exposing their activities and depriving their leaders of their ill-gotten profits. overall, treasury has imposed sanctions on more than 1,500 foreign drug traffickers and related individuals and entities under the kingpin act.
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these designations not only disrupt the financial life of those targeted, they also help unlock valuable intelligence as panicked drug traffickers scramble to recover after being added to our list. second, regarding iran, tfi helped put in place the toughest, most comprehensive sanctions regime in history. iran found itself under the greatest sanction induced economic and financial pressure any country has ever experienced. tfi led this effort by conducting intelligence analysis, taking action to cut iran off from the international financial sector, and holding violators accountable. equally as important, tfi made this a multi-agency and multilateral enterprise. our leaders and officials not only worked with congress and departments across the federal government, they helped build a vast international coalition with partners from europe to china. today, tfi enforces a sophisticated regime of
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sanctions on iran that incorporates 10 statutes, 26 executive orders, and 4 united nations security council resolutions. this program was put in place to persuade iran to abandon its pursuit of a nuclear weapon. and let us not forget that there was a time when critics said sanctions on the iranian regime would never work. but because of tfi's effective and innovative actions, we have proven exactly the opposite. these sanctions have deeply damaged iran's economy, causing its economy to shrink, its currency to drop, its unemployment rate to jump, and its inflation rate to skyrocket. currently, iran is at the negotiating table for the first time in a decade and progress on iran's nuclear program has been halted while key elements of this program have been rolled back. in this instance we have seen the powerful impact of coordinating effectively with the international community. the impact of our actions can be greater than the sum of its individual parts. had we decided to act alone or with less cooperation, our actions would have been much less effective. the balance between tough unilateral actions, while
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maintaining broad support for collective action has brought iran to the negotiating table. we do not know what the ultimate outcome of these negotiations will be and all options remain on the table to keep iran from acquiring a nuclear weapon, but we have a chance to resolve our differences peacefully and without the use of force. finally, i want to talk about ukraine, and what tfi has done to help promote stability in central europe. the ukrainian people have shown real courage over the last few months as they have sought an independent course for their country and a government that reflects the will of the people. the recent election demonstrates that ukraine continues to make progress despite the significant challenges it faces. during this fragile period, the united states has led the effort to build international support for ukraine, and treasury has played a central role in this undertaking.
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working with the international monetary fund, the world bank, and our g-7 partners, we have led an effort to mobilize a multilateral response to the situation in ukraine almost immediately. multilateral and bilateral support has provided financial and technical assistance to stabilize ukraine. while we have worked to support ukraine's economy, the russian economy has become increasingly isolated from the international financial system. and europe and the g-7 have joined us to impose targeted sanctions on individuals and entities who have contributed to the destabilization in ukraine. our coordinated and carefully calibrated approach has put enormous pressure on russia, with limited collateral damage to the u.s., european, and global economy. we have targeted key officials and their close associates. we have targeted institutions that support the russian leadership. and the president has given us the authority to take even more powerful action if russia continues to support armed separatists in eastern ukraine.
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our actions have helped weaken russia's economy and demonstrate again how international cooperation is a force multiplier. the ruble and russian stocks have both dropped significantly this year, and anxious investors are reconsidering russian markets. the imf has forecast that $100 billion in investment will exit russia this year, and russia's economy has already started to contract. in the meantime, russian companies are finding it harder to access international sources of capital, and russia's credit rating was downgraded to just above "junk" status. our goal was to impose a cost on russia for its occupation and attempted annexation of crimea, and to deter russian military intervention in ukraine. last week's election was a promising sign for the future of ukraine, but there is evidence that russia continues to allow the free flow of weapons, funds, and fighters across its borders and president putin's next steps are still not clear. what is clear is that our leadership has made a
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difference, and tfi has made a difference. it has made a difference the world over by promoting stability and providing us with alternatives to combat. and this is possible only because of the men and women at tfi who have committed themselves to protecting and serving our nation. we are talking about the analyst combing through data and finding a dangerous financial transaction. the policymaker flying to yet another country to gain support for new strategies to safeguard the international financial system. and the department official meeting with bank executives to stop a money laundering operation. because of the quiet dedication of these public servants, we are confronting our strategic challenges, we are making progress, and we are a safer and stronger nation. thank youand thank you to the tfi team for your service and
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commitment. >> this is a little less than an hour. >> thank you very much. i am from the new york times, and it is a great honor to be here. onor to be here at the csis event here and our discussion today is going to be about financial intelligence. it flows very nicely from what you just heard from stuart, and also from the first panel, and we've got a great panel of experts here. to my immediate left, your right, michele flournoy who was undersecretary of policy at the pentagon for how many years? >> three. >> three. and has been out just about long
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enough now to have plunged back in. jane harman who of course served in congress, and served a number of different intelligence committees along the way. and now runs the wilson center. and general keith alexander, who just left eight years, is it eight years at nsa? the last year was a doozy. some people try to leave the last year of their job quietly. but general alexander decided that would be too boring. so, my hope today is to pick up from where the panels were, talk a little bit about the role of intelligence in some of these individual cases, and then look forward to where these tools are going, how they've been affected by some of the recent disclosures, but also begin to
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talk about what kind of utility they could have that we haven't thought of yet, that, you know, where this may be -- where this may be headed. i thought that one place to start might be with the question of what's worked, and what hasn't. something that you heard tom donilon and steve hadley take up, and mr. donilon made the point that, for example, we've been much more successful in the sanctions implementation in iran than we have in north korea. and one of the natural questions that raises is, is that because of the unity on sanctions, or is that in part because of the intelligence challenge that one faces? obviously iran is a much more interconnected society. let's start with you on that subject.
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what's your overall sense about how much of this is an intelligence issue versus nonintelligence-related challenge? >> i do think having a very high quality of detailed financial intelligence with regard to iran's money flows, did enable us to build a much stronger sanctions regime than had previously been possible in a couple of ways. one was the one stuart mentioned, in that we could go to private sector entities and raise their level of awareness of the reputational risk of their dealings with some of these iranian entities and financial institutions. the second is on the diplomatic side. when you walk into a country like china or russia where there
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may be reluctance going head-long joining a sanctions regime, and you are able to not only urge them with arguments, but actually show them specific relationships and specific financial flows that tie directly to illicit activities that they, themselves have are on record condemning, that's extremely helpful. it puts the diplomatic conversation on a completely different basis. >> you're talking like somebody who has a specific memory in mind. >> no specific memories at all. i would think those post office discussions happened between my state department colleagues along with stuart and david. >> your point is the chinese can't simply say all this stuff happens, who knows, we asked them to cease and desist.
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>> it's going to put you politically at risk being a power that says you're ant anti-paliferation yet allowing this to happen under your nose. >> the point was made in the first session that north korea was the first place where we saw a lot of this being used with the makow bank. then we saw some pulling back at that time. jane, you were in congress at that time. tell us what lessons you think
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should have emerged from the north korea experience then carried forward into iran and the financial terrorism cases? >> let me make a couple of general comments first. i'm on the house intelligence committee, senior democrat and i love this guy, so good at what he does. i remember telling him, stuart, you can never leave. it's it it's he'd -- it's an edict. one sunday night i'm at home eating dinner with my family and the phone rings. hi, jane, it's stuart. i'm leaving. it was a hugely disruptive moment in my life and i never really recovered. i think he was also trembling so i am pleased to have that impact
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on him. it turns out as fabulous as he was, the crowd that has followed is also fabulous. that's kind of my personal story. now about all this stuff. i may be the only recovering politician in the room. is anybody else in my situation? isn't that fabulous? you are all so much more intelligent that i didn't pick that line of work. seriously one of the best things you can say about congress and this program is that congress has not messed it up. it was treated as a bipartisan effort from day one. i haven't seen no, this is not singular sniping. i haven't seen one shred of it. that is truly amazing. so congratulations to all of you doing this job in such a seamless way.
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on the sanctions, i may be right or not, of the day, but i think that in this case congress hasn't micromanaged this easier. in terms of sanctions against specific banks, that judgment has been delegated totally to people who actually know what they are doing. so in the makow case and north korea, obviously, north korea went ahead and did what it did. i don't think it paid a penalty in the way that other places have. i just want to say i think the sanctions against russia played a very big role in russia's change of course on ukraine. i think they worked. people who said just sanctions on individuals don't matter. they matter. i think less effective? i don't think that means this
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crowd was not effective. i think north korea because of its sort of strange-o economy can be less impacted by sanctions than perhaps other places. >> general alexander, start first with this question of whether or not it was the intelligence on iran that made it so much more effective, whether -- how that compares with dealing with a society like north korea, then i wanted to taking you to some of the terrorism examples that treasury has pursued in recent times. >> i actually -- well first, juan, thanks for setting this up. thanks for all you did. it was a privilege and honor to work with you. stuart, david, lesley, really has been. you know, i think what they've done for our country, what treasury has done in this area has been absolutely superb. i think we owe them a big round
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of applause. >> here, here. >> it's the only way i can get an applause. when you look at the impact you have on a country like iran, and i agree with what jane said. the fact is iran's got some economy by withholding it you can have a larger impact. if you don't have anything, telling them you are going to take something away and they look around and say what's left, which is essentially where we are in north korea, i think the differential is much less. i think there are credible cases where both of these apply to it where it can. from my perspective on the intel side, there is great work being done. it's just the impact on iran will be more. you can have more. and they are more connected. their people in iran see this. they're a factor. because they're a factor and it impacts the people, it makes it more difficult on the regime. that in and of itself is a big differential.
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in north korea, there is no real credibility network there where the north korean people see that difference. i think when you combine all that, that's really the real case that i think drives the apparent success of sanctions on iran versus north korea. >> how much time at the nsa do you spend devoting resources, signals intelligence for sources and so forth, to following the financial flows, and to what degree is that done elsewhere in the centers that stuart was just describing and so forth? has there been a change of mission over the years you've been there? >> i don't spend any any more, so it's down to zero. they were great partners. i think they are doing incredible work. and the counterterrorism and on the sanctions, a great partner for the whole intelligence community, not just nsa. we were part of a bigger team that was working this in the interest of our country and our
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allies. i think that people who understand the financial stuff really brought in some great, great work here. we had some great analysts that we occasionally use, okay, all the time, that helped in this case. >> i wanted to turn to a couple of cases involving terrorism. we asked treasury in the run-up to this if they could give us a list of some cases which have come out into the public now in which there were good examples of the terrorist tracking program being used. one they brought up that we've been discussing here was the investigation into the nawas brothers. they were arrested in september last year. they were traveling from france. they were arrested in the uk, i believe.
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they were accused of traveling to a terrorist camp in syria. data from the finance program provided account numbers that helped track them. you might give us a sense how this works in real life? >> i think that is a great example. if i could step back and give information for everybody here. this is really important to set the stage for what's going on in the terrorism arena. when you look at 2012, 671 attacks, and over 11,000 people were killed. over 21,641 deaths, almost
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double. that is an incredible set of statistics. state will go and validate all of that. we can argue over so you counted this level of thing. my comment is let's argue over the things but look at double in a year. syria is really a problem. our intelligence analysts across the community have tools to work with. we were talking about that. what tools do they have? this, the meta data programs, where they are trying to guess a wheel of fortune, there is a set of blank numbers up here. you get to say i can use this program, is there a "t?" if a "t" doesn't come up, you can say is there a financial component to this? if there is they can put that on there and start to look at letters. armed with that, what they are able to do is get out in front. that's what happened to the nowaz brothers when you think about it. because they had information, account numbers and all these things you named there.
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they were able to see from guys trained in syria, traveling through france to dover, were picked up because there was information from this program and others were able to stop. that's not the key thing for us to remember. the key thing is look, they stopped a terrorist program and there is a bunch more in this whole thing there were 20,000 people killed in 2013. look how secure the united states and europe are. because of the great work of people like this across the community pulling all those tools together, putting them on the table. the great part of this set of tools, the think i think is good about this set of tools, it's been done with europe involved. europe says, we're there, we agree with the way you're using it. we'll give you access to it. we're all in because we see what you're doing with it. and that may, these tools that they set up, may set a framework
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for using other tools like meta data. i think that's a huge step forward for us. it's not going to get less. dna talked about what's coming out of syria. you have the nawaz brothers, but there are several thousand out of syria, a great deal coming out of europe and the united states. they're leaving to conduct attacks. it's going to happen. we need these tools and partnerships with countries in europe and around the world if we are going to stop them. >> michelle, you were in office during the early days of the arabe, you were in office during the early days of the arab revolution. you were getting a constant flow of the data you were using to target individual cells and have to make the decisions along the way about where the limits are on what the u.s. can go do. tell us a little bit about how
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the kind of financial data plays in that you're getting from these kind of programs, plays in with the other stream of information and decisions you're having to make along the way. >> i think with whether it's the case of syria or other cases like afghanistan, iraq, what this kind of financial intelligence becomes a pretty critical enabler for lots of other agencies, as well. so in some cases, it's going to enable a combination of justice and law enforcement to actually take, to pursue prosecutions or take law enforcement action. one of the things we saw, we had an afghan threat finance cell on the ground, which had not only traditional intelligence community representatives, but folks from treasury, folks from d.o.d., folks from dea, fbi, and
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the pooling of the information, pooling of authorities and the fact we had vetted afghan partner units to work with meant that you had much greater effectiveness in actually taking some of this data and disrupting the financial flows that were supporting the insurgency and associated groups. this kind of data also has helped enormously for dod, special operations forces to really just better their understanding of these networks. so if there is an occasion where the military has to actually target, having the understanding of the financial flows is just that much -- helps you understand the network that much better. i also think this kind of work can be very important part of building partner capacity for taking action. the president in his speech
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lately recently talked about a shift towards really emphasizing building the capacity partners at the local level to deal with terrorism on their soils. helping them use this kind of information, develop their own sources of this kind of information would be very, very important. the last thing i would note in the case of syria, you have groups like hezbollah very, very active. some of the sources of hezbollah's funding with regard to international drug trafficking and so forth, we talk about reputational risk. having the opportunity to publicize some of that sources of their funding, which are very much cast a -- raise a lot of questions about their state d - poke a lot of holes in their rhetoric, shall we say, in terms of what they are trying to do in the region. i think this is an enabler for
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law enforcement, for helping our military understand these networks and partner building and reputation risk. whether it's syria or afghanistan, these elements are common across the various cases. >> you talked about before the utility in dealing with the chinese on weapons proliferation. tell us in the terrorist case if you track something back and it ended up in saudi arabia or some other country where there's obviously been a lot of funding going on of medrases, how did that same dynamic you described with the chinese, for example, translate when doing this in the terror context? >> sure. i think it has enabled conversations with certain countries about support
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happening in their society the state may not condone or may not even be aware of. my own knowledge has to do with the case of pakistan where we were able to trace financial flows across the border and among different groups, and even initially when pakistani authorities were in denial about some of what was happen iing an supporting terrorist and insurgent action coming across the border that was directly impacting american forces. we were able to say, no. here is the evidence. this is happening. look for yourselves. it can make the diplomatic effort much more compelling. >> is there ever a kickback to that, maybe you've seen or you saw in congress or since you've left, where you begin to develop
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the reaction from the target country that comes back and says this is not an appropriate use of your intel capability? of course, they would rather maintain the ambiguity. did you ever see any objections to the u.s. program in that form? >> well, i saw famed outrage because deniability is built into a lot of the actions of governments, includes our government. that's sort of part of the whole intel landscape. i also saw efforts which are long standing. i don't think they were developed to defeat these programs, but they work. the hoala network makes it very hard to track what's going on. the other is moving large amounts of cash that don't go through financial institutions
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which still happens. i remember the frustration in congress trying to figure out who was supporting hamas and some of the terror operations in the region especially in gaza against israel. $25,000 a head went to families of suicide bombers, for example. where did that money come from and how did it get there? one more comment because i think it is such an effective remedy and the state department capably applies it. let's never underestimate our sea s asymptomatic -- aasemmetric
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strength. these cools are enormously effective. i don't think we have any other tools this effective. a final comment in terms of congress' bipartisan support is that in each party there are no one missed this in pacifist wings and engagement wings, and financial tools are supported by both of these wings. military tools are not. certain other kinds of engagement tools are not. this is probably the best set of weapons we have in a very dangerous world. >> you made the observation this may be a building block to get them to help in meta data
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programs, other intelligence collection programs. if you look across europe these days, if if you hear anything, you hear something in the reverse direction that since the revelations of the past year including the surveillance of european leaders, chancellor merkel and others, but also the revelation of some of these programs, there seems to be pressure on these governments not to cooperate less than they have. you heard one of the earlier sessions that there is a sense steve addly said the europeans don't believe they are under great potential terrorist threat as the united states does and they don't believe the weapons proliferation threat is as great. in the famous last year you had in office, did you see a reversal of cooperation in any way in some of these cases? >> i think there is a public discussion and then private work. all the countries realize the
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threats on terrorism. anyone that says they don't, they are wrapping up the terrorists. we give them the leads, they wrap them up. they know this type of data is helping. i think, you asked an important thing. i would take the next step on. that is so the terrorist program actually has a way of treasury can go to europe pol, show they meet a set of standards everybody agreed to. my comment with respect to the meta data program, in reality, europe and many of the european nations have a way of working with meta data, so do we. we want it for common good. why can't we use that together and come up with a framework that does it and helps us? i think we can. i think there is good in taking these steps on what we can do together, that's a policy decision, not mine.
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but what i can say is there is tremendous value in the partnership. i think what the policy makers need to do, that's michele and company. >> former policy. >> recovering. >> where is the benefits here? from my perspective it's from the counterterrorism and cyber arena. we have to work together here and set the framework. we have to have a way of saying this is where we all agree. here's where we are going to have to settle and here is where we will never agree. in those you've got some of these. every nation will act in its best interest. it gets down to it. nations and the elected officials are responsible for protecting that nation are going to act in their best interest. that's us, that's all the other countries. >> michele, he perfectly set you up. >> sorry. >> where this is going a few years out. we heard in the first session,
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significant disagreements on cyber policy, not only between the u.s. and china where we are defining the problem differently, but i would say the u.s. and europe where the privacy debate is under way in a great way. differences with many of our other partners. if you had to look at where you would like to see this and where you think it will be in five years, the degree of cooperation on things like terrorist finance, on setting some common rules on cyber that would enable the intelligence to go beyond just finance, where do you think we will be? >> those are two different things. where i would like us to be and where we may be. where i would like us to be is having benefited from a truly elevated, strategic debate about
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the benefits and, you know, risks to be managed, associated with collecting and using different kinds of meta data, i would like to have that intelligence dispassionate conversation in the united states. that's a big, tall order. based on that have stronger legislation and reform that we need. we need cyber legislation in this country. the danger is we are going to rush to it based on the emotional response to the snowden leakage based on a truly, informed, strategic debate about benefits and risks and how best to manage the latter. >> what would you hope that legislation had in it? >> i think that i would hope
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that it would have positive post war authorization of certain types of cyber collection and analysis. it is a critical tool. i would like to see the same kind of discussion in europe. then building some kind of cooperative framework. again, that is rooted in a balancing of the very real security risks and the very real privacy concerns. right now we have a lot of heat. we have people using this for political purposes. if that's the way we in the united states and our close partners in europe come up with legislation, we will get it exactly wrong. >> at the wilson center, you are going to be doing a conference
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in about two days time on the post snowden period. one of the features we have seen on this, we have individual countries talking about walling off parts of their internet. >> part of the exactly wrong. >> that was part of my question. what is the actual danger if that happens to intelligence gathering and also internet freedom? >> let's start with edward snowden. i'm hopeful is in 15 minutes are almost up. i thought his interview the other night was extremely revealing of is incredible personal arrogance and misguided approach to all this. he's not a real whistle-blower. it would be nice if there was evidence. it would be nice if the nsa could put out this pathetic
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e-mail chain earlier. his actions moving first to china and russia are enormously suspicious, whatever they turn out to be, and claiming none of his material was exploited doesn't pass the laugh test. having said that, the debate we are having is useful. i keep cringing every time someone talks about the balance between security and liberty. i don't think it's a zero sum gain. i think it's a positive sum gain and this relates to everything you're asking me. we protect civil liberty and security at the same time or we have neither of those things. as we think forward to what we should do in this country and collaborate with others, we should keep that in mind. the super legislation congress is not passing has to include a requirement for the private sector to share and then
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indemnification. everything is in private hands including a lot of our grids that are essential to keep all of us safe from cyber attacks. there better be cooperation. they are not sharing for competitive advantage and for share of lawsuits. they have to share and congress has not made this possible. there is an executive order, but not adequate. as to the international scene vulcanizing the internet, it is such a dumb idea, it is just staggeringly dumb. i don't think it would work. this notion u.s. providers were going to set up for different places i view as silly. i think in the end consumers are not going to want this. they may figure out there are
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fire walls blocking them from not getting things they want that are not in their particular service providers' range of action. i think this thing will fall to a great big thud in the virtual world. a virtual thud, and won't work. back to the beginning, we need to have the right conversation in this country and internationally with the anxious publics in both places that explains why security and liberty are not a zero sum gain. if we can make that sale, and it will take some serious conversation and some intelligent hearings in congress, that may be an oxymoron, but if we could do that, i think in the end we would have decent cyber legislation and decent cyber regimes, which would be good. norms of international conduct that will in the end protect consumers and the public better than anything else. >> we have about 10 or 12 minutes left to take a few questions from the audience.
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we ask they be succinct. bear in mind your questions are the last thing between all of your compatriats here and lunch. >> you should have been national security advisor. my question is two-fold. we remove the sanction s sancti remove the defense shield in poland because the argument was iran wasn't a threat. then we move further and we decide to remove the sanctions from iran, even though we know that iran along with russia and china are obtaining electronic, computer and information they
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shouldn't be. i need to understand what type of smart power was it to remove sanctions from iran at the time we removed them when we are not out of afghanistan, and iran is using water and other forms of natural resources as weapons? the commodity in the world is water. >> two points of clarification. we have not removed the sanctions. the sanctions remain in place. when iran accepted the interim deal which halts its program there was a very small release of frozen assets or funds. the sanctions regime is still very much in place. that's part of why they are at the negotiating table. i don't believe -- i'm not in the administration any more, but i believe they have every intent
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of keeping that regime in place until we get to preventing iran from pursuing nuclear weapons and reaching a final agreement. the other point of clarification is, we didn't abandon missile defense in europe. we deployed a more robust system more quickly. that includes systems that are already being deployed in poland today. and in turkey and with the sm-3 block two missile which is a more capable system that will be deployed faster than the original timeline. that is because there is shared u.s. and european concern over the ballistic missile threat that iran poses to europe. >> steve clemens? >> sometimes talking about fiction allows us to talk about the real world more easily.
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david ignatius' last novel "blood money" takes financial tracking intelligence, and you see in that novel that is taken by adversaries and used by cia, nsa and others. i'm interested to what degree implied is the united states is in such a leading position in this capacity, there hasn't been discussion that much about where the gap is with the next leaders and whether or not some of what we are talking about today can be used in a way against american interests by others? >> good question. what did you see in the way american partners and adversaries were developing their own capabilities? >> this is the issue about -- drives you back to the balkanization. it's interesting to see technically what's going on out there, and how good silicon valley and others are. it's doubling every two years.
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what you learned your first year of college, by junior year half of what you learned is outdated. i think in that respect dropping out and going against that kind of power doesn't make sense. quickly gets you to dropping back, not only to where iran dropped back because of sanctions and the way they live today. if you look at their infrastructure versus everybody else. with respect to others using this against us, i think there's always a concern of countries going after ours because of the use of the dollar. i think that's where the eupropol approach is one respected not just by us but many countries. we need partners and allies to take the same stance we do.


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